888-586-2261

Free credit Reports! Hhhmmm… really?


The above quote is what someone who called in from our website said almost word-for-word. Unfortunately, she is right. There is no free lunch, as they say. The sites she mentioned, and many more, are not really free, even if the word “free” is displayed somewhere. Furthermore, it is not always clear what you are getting. Creditkarma.com, for example, gives the impression you are getting your credit scores and reports, but in reality they have their own “credit management” platform that does not include your real credit report, only partial information pulled from it. In my opinion, it is this small word free coupled with credit reports or credit scores that throws people off because they have heard that you can get your credit reports somewhere for free. There is only one place where your credit report is 100% free, with no bait and switch, or “small print”, or a catch. More on this in a moment.

Here’s how they work:
Except for sites like creditkarma.com, here’s how most of them work. First, in various catch phrases and combinations of products offered (read each carefully), they tout in big print that you get credit scores and/or credit reports from all three credit reporting agencies, Transunion, Equifax and Experian , with call to action buttons saying things like “Try it Free”, or “Get Started Now” and “Click Here to Start”. However, usually in small print, they state it is a free trial for 7 or 14 days. At the end of the free trial you are immediately transformed into a monthly credit monitoring customer, which costs between $14.95 and $29.95 per month, depending on the company. The ones that only give a 7 day trial are particularly tricky. Your reports aren’t usually available for 3-4 days due to “processing”, which gives you 3 days to view it. There hope is that you will “accidentally” pass the 7 day mark without cancelling the trial. As a rule, it is my opinion to avoid the 7-day offers. If you don’t cancel within the 7 days, they immediately charge you their monitoring fee. Additionally, needless to say, it is not always easy to cancel.

Tip:  Some offer a printer-friendly version. if you print it out immediately,         and make sure to call to cancel, then, depending on the site’s offer, you         could actually get a free credit report.


Credit Karma is truly free, but you don’t really get all your reports and scores, only ONE score, as mentioned above, and their proprietary credit management platform. Credit Karma is, in my opinion as a credit consultant, useless, and useless translates in my book as a gimmick, of sorts, because customers think they are getting something useful. (Update 6/14/15: Since the writing of this original post, Credit Karma now offers scores and reports for two of the big three credit reporting agencies, Equifax and Transunion. They still don’t offer information from Experian. Keep in mind that the scores they provide are NOT your FICO scores).

The ONLY place you get a free credit report without pitfalls to avoid, and hoops to jump through is AnnualCreditReport.com. The Fair Credit Reporting Act (FCRA) requires the there major credit bureaus to provide one free credit report per year. You can get one at a time each quarter, or all three at once, once each year. Keep in mind, though, that this does not include scores, FICO nor VantageScores. Go here for a comparison of the FICO Score and Vantage Score. Most lenders use FICO, especially mortgage lenders.

Our favorite paid site is Privacyguard.com and instructions for pulling your credit so that we can give you a free credit report evaluation can be found here. You get all three full reports, and all three VantageScore credit scores. Privacyguard.com gives you a 14-day trial for free, and then only costs $19.95 per month for monitoring. Monthly monitoring is not necessary all the time, but we do recommend it if you are in credit repair and re-building phases, or looking to do something requiring credit in the near future. (We are NOT affiliated with privacyguard.com)

Has this been helpful? Please feel free to commment or share on social media. We like helping people.

Tweetable Takeaways Include:

• There is only one place where your credit report is 100% free, with no bait and switch, or small print (Click to tweet)
• The Fair Credit Reporting Act (FCRA) requires the three major credit bureaus to provide one free credit report per year. (Click to tweet)
• Most lenders use FICO (credit scores), especially mortgage lenders. (click to tweet)

What is this mistake? drum roll…..Closing credit card accounts. Go ahead, admit it. You have thought about it at least once, and understandably so. For a lot of us, it’s those darn credit cards that got us in trouble in the first place, (so we like to say). Therefore, why not just close them and cut them up? That’s what some of the financial and money management gurus on the net will say. Depending on your financial situation and goals, for most of us there is a very important reason you don’t want to close out your credit card accounts, especially if your goal is to repair and build your credit score. If you have other goals, like getting out from under an ill-controlled mountain of debt, and curtailing credit card spending, then you will want to talk with a credit and debt counselor first to put in place a comprehensive money management plan, including a budget. For this particular credit blog post with emphasis on credit score repair and building, closing out your credit cards could be a mistake. I am going to direct you to a well written CBS article by Adam Levin of credit.com that does a great job explaining why you don’t want to make this most common credit mistake.

Go here for the CBS News article

Personal Information such as name, address, date of birth, Social Security Number and employment data (where you work(ed) only) are included.

Account information. Account information includes loan amount, credit limit, balance, payment dates, payment rating and history, to name a few.

Collections by 3rd party collection agencies.

Public records like judgements, tax liens, bankruptcy, etc. are reported.

Inquiries, when and where, but not for how much, and why you applied for credit. Inquiries initiated by you are called “hard” inquiries, which are results from applying for new credit such as credit cards, vehicle loans, mortgage, etc. Go here for more on inquiries and the myth surrounding their impact on your credit score.

Information NOT included in credit reports:

No salary or income history whatsoever is included

Medical history is not included, although medical collections via a 3rd party collection agency may be.

No arrest or criminal records are reported.

Property tax records are not included.

Insurance premiums or insurance claims are not reported.

Personal information like gender, marital status, race, religion, nationality, political affiliation and personal lifestyle is not a part of your credit reports.

Payday loans (unless in collection), debit cards and prepaid debit cards are excluded

Inquiries initiated by you online, called “soft inquiries” are not reported and have no effect on your credit score.

Financial Institution accounts like checking accounts, savings accounts, CD’s, or investment accounts. NSF checks will appear if sent to collections.

While some of the above information like income and assets may be considered by lenders such as mortgage banks, and auto finance companies, etc., in their decision process, you need only be concerned about the information that is reported on your credit reports as far as your credit score in concerned. Information not reported on your credit reports does NOT impact your credit score.

By Blair Warner (see About US page for more info.)

One out of Five Consumers Likely to Receive Meaningfully Different Score than Creditor



WASHINGTON, D.C. – Sept. 25, 2012, the Consumer Financial Protection Bureau (CFPB) released a study comparing credit scores sold to creditors and those sold to consumers.

“This study highlights the complexities consumers face in the credit scoring market,” said CFPB Director Richard Cordray. “When consumers buy a credit score, they should be aware that a lender may be using a very different score in making a credit decision.”

The complete Analysis of Differences between Consumer and Creditor-Purchased Credit Scores is available at: http://files.consumerfinance.gov/f/201209_Analysis_Differences_Consumer_Credit.pdf

The Dodd-Frank Wall Street Reform and Consumer Protection Act directed the CFPB to compare credit scores sold to creditors and those sold to consumers by nationwide credit bureaus and to determine whether differences between those scores harm consumers.

THE STUDY DETERMINED:

RECOMMENDATIONS:

2. Thou Shalt Not Miss Payments. Paying a bill late will hurt your credit, but missing a payment will damage it even more. “If you do so, you can’t make it up,” Sweet says. In other words, making two payments in the next billing cycle will not remove the blemish from your credit history. Whether or not you pay your bills on time determines 33% of your score.

3. Thou Shalt Not Limit Loan Types. Despite what your bank account may think, a car payment and a mortgage may not be enough. Also managing an installment debt, such as a credit card, is a good indicator of credit savviness. There are five elements to the credit score model and revolving credit, which allows consumers to charge and owe different amounts each month, is one of them. “It’s 10% of the score,” says Gail Cunningham, vice president of public relations for National Foundation for Credit Counseling.

4. Thou Shalt Not Close Unused Credit Card Accounts. Actually, just use caution, says Sweet. A factor in credit score models is your utilization, which is your debt vs. how much is available. For instance, if you owe $4,800 on a card with a $5,000 limit, you’re using most of your available credit and this “utilization” will have a negative impact on your score. Counting toward 30 percent, your utilization is the second highest factor in your credit score. You should charge no more than 30% of your available credit, recommends Cunningham.

5. Thou Shalt Not Be A Credit Tease. Don’t run up charges all over town or apply for several cards at once while looking for the best rewards program. Recent inquiries means that you have accessed your credit and this can affect your score negatively. “This signals that you’re desperate for credit and don’t have enough cash available for your purchases,” says Cunningham. She adds that if you are shopping for a major purchase, such as a mortgage or car loan, the inquiries will usually roll together into one.

6. Thou Shalt Not Rob Peter To Pay Paul. Don’t charge anything unless you know how and when you are going to pay it back. One of the benefits of credit is the ability to spread out payments on a big purchase, not to delay paying with hopes that the money will come in – from somewhere. If you need to use a credit card for convenience, use a prepaid card or a secured card that enables you to make payments to your own line of credit.

7. Thou Shalt Not Get On The Call List. When a debt turns into a collection account, it’s an indication that you got yourself in hot water. Once a collection agency jumps into the arena, it becomes the owner of the debt, which will show on your credit history. Trying to make payments to the original debtor will not make the collection agency or the negative mark on your credit go away.

8. Thou Shalt Not Forget The Little Things. That library fine you didn’t pay or the health club contract you signed but didn’t honor can show up on your credit report. Any debtor has the right to report unpaid bills to the credit bureaus, and many of them exercise that right.

9. Thou Shalt Not Negotiate. On paying less than what you owe, that is. If you cannot repay a debt in full and a creditor agrees to settle for less than you owe, you haven’t won the battle. The transaction will be reported as a settled account and this will hurt your credit score. Instead of negotiating to lower the overall amount of the debt, ask to have your interest rate or monthly payment lowered so that you can continue to pay the debt off in full. (Sometimes negotiating is the best choice. Each case is different)